Gloom And Doom

July 11, 1985

NO SOONER had business columnist Dick Marlowe, the Sentinel's Dr. Doom- Gloom, written about the slowing economy and the next recession being a ''doozy'' than -- oops -- the current quarter for economic growth came in at more than 3 percent. The worry a year ago was that the growth rate was overheating and how much nicer and more sustainable a growth rate of 3 to 4 percent would be to forestall a possible boom and bust.

Remember five or six years ago when undue attention was given to the president's so-called Council of Economic Advisers? Their collective wisdom and that of other leading economists produced a new word for the English language -- stagflation. The American malaise of that period was the product of these advisers.

Space limits recounting just a few of their misjudgments when people hung on their every utterance:

-- Why was it that with a modest deficit, the country then had double- digit inflation and a 21 percent prime rate compared with today's 4 percent or less inflation and a 9 1/2 percent prime? They cannot answer.

-- Why was it that with a much lower deficit there was a flight from a weakened dollar into gold and other commodities of intrinsic value? They cannot answer.

-- Why did they say the burgeoning deficit would keep the bond market oversupplied with debt instruments and keep interest rates from falling? Other borrowers would be forced out of the market, they warned.

-- Why was the world misled into the shortage-of-oil mentality by our forecasters, when instead we find the world awash with the stuff? They have no answers.

But the worst scenario being peddled by pundits is the so-called evil of a strong dollar, without which we would lose the war against inflation. Look beyond our borders to the miseries caused by a weak currency.

Marlowe suggests we are in the early stages of a recession and it will not be a mild one. Remind him of this forecast six months or a year from now. Today we can tell him orders for major appliances went up 4 percent, the largest increase since January.